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EBay Profit Slides; Outlook Falls Short Of Expectations

A sign is posted in front of eBay headquarters in San Jose. (Justin Sullivan/Getty Images)

SAN JOSE (CBS/AP) — EBay’s revenue increased in the second quarter as its PayPal business and namesake online marketplace continued to grow. But net income fell amid higher expenses and its outlook for the current quarter was shy of Wall Street’s expectations.

Shares of the e-commerce bellwether declined by about 6 percent, to $53.95, in after-hours trading Wednesday. Though he called the quarter’s results strong, CEO John Donahoe said economic weakness in Europe and Korea will “continue to be a challenge” in the second half of the year.

EBay Inc. earned $640 million, or 49 cents per share, in the April-June period. That’s down 8 percent from $692 million, or 53 cents per share, in the same months a year earlier.

EBay’s operating expenses were $1.92 billion, up 12 percent from a year earlier.

For the current quarter, eBay is forecasting earnings of 49 cents to 51 cents per share and adjusted earnings of 61 cents to 63 cents per share. Analysts estimated higher adjusted earnings of 65 cents per share. EBay expects revenue of $3.85 billion to $3.95 billion, short of analysts’ expectations of $3.97 billion.

EBay still expects adjusted earnings of $2.70 to $2.75 per share and revenue of $16 billion to $16.5 billion for the full year. Analysts forecast adjusted earnings of $2.75 per share on revenue of $16.31 billion.

The midpoint of San Jose-based eBay’s earnings outlook for the year is below analysts’ average estimate.

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